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Precede NEW YORK

January 28, 1985

WASHINGTON (AP) _ Two Office of Government Ethics staff members concluded that Attorney General-designate Edwin Meese III violated government ethics rules, but the agency director overruled them and found there was no violation, Meese’s lawyer said today.

Leonard Garment, attorney for the White House counselor, confirmed the investigators found violations in the federal appointments of two men who helped Meese financially. But Garment said the preliminary finding was changed after he was given a chance to submit a rebuttal.

Meese faces confirmation hearings Tuesday before the Senate Judiciary Committee and the committee chairman, Sen. Strom Thurmond, R-S.C., ″has officially requested″ the two staff members and their boss to testify, according to panel spokesman Mark Goodin.

The staff report was overruled by David H. Martin, director of the ethics office, who wrote Thurmond on Jan. 24 that ″Mr. Meese is in compliance with applicable laws and regulations governing conflicts of interest.″

Martin did not return several phone calls to his office.

The findings by the staff members focused on Thomas Barrack, a California real estate developer who received an Interior Department position, and John R. McKean, who became head of the Postal Board of Governors.

McKean lent Meese $60,000 in two loans and Barrack helped arrange the sale of Meese’s California home, including lending some of his own money to one of the purchasers. Both matters were covered extensively in the report of an independent counsel, who investigated Meese’s behavior and found he violated no criminal law.

Garment said Meese received no favored treatment in the McKean loans - even paying higher than market rates - and added that Meese did not initiate the postal governor’s job. That was done by another White House official, Michael Deaver.

Garment added that Meese was not aware that Barrack was financially involved in the sale of his home when Barrack received a federal appointment. Garment said Meese believed Barrack only helped find a buyer without making any financial commitment.

″The staff recommendations were overuled by the head of the Office of Government Ethics as part of their routine recommendation and review process,″ Garment said.

At the White House, deputy press secretary Larry Speakes declined comment saying, ″I don’t have anything on it specifically, except Ed Meese will be testifying tomorrow. I presume the Senate will have an opportunity to ask any and all questions.″

The ethics standards, among other things, forbid an official from taking actions that ″might result in, or create the appearance of ... giving preferential treatment to any organization or person.″ They also urge an official not to take actions that create an impression that he has lost ″complete independence or impartiality of action.″

In another development, Common Cause, the self-styled citizens’ lobby, purchased a full-page advertisement in the Washington Post quoting 20 newspaper editorials arguing that Meese should not be the next attorney general.

Said Speakes, ″I wouldn’t pass judgment on what Common Cause does with their money.″

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